Abstract: Bacillus subtilis isolated from sugarcane rhizospheric soil, was found to survive upto 9% NaCl, pH range of 5.5-9.0. It harboured a plasmid of 20 kb which conferred salinity tolerance in transformed E. coli colonies allowing the later to survive 5% NaCl stress. Both Bacillus and transformed E. coli colonies produced PHA, stained positive with nile blue. At low pH and in presence of NaCl, both B. subtilis and plasmid transformed E. coli survived better and produced PHA, but cells did not sustain alkaline pH. Restriction enzyme digested fragments showed homology with genes encoding DHQase1, histidine kinase, dehydratase from Hot_dog family, in Blast search analysis and are found to be associated with PHA synthesis.